As does the approach towards an expansion of Heathrow. Again, there is one policy that proclaims Britain to be open for business, and another that makes it difficult to get here. The Prime Minister's scuttling of a third runway is forcing BA to plan a hub at the new, modern, under-utilised Madrid airport, so that high-flying businessmen can meet there without suffering the delays and hassles of gathering in London from locations around the world.

There is more, and worse. Merlin the magician may have dwelt in Camelot, but Project Merlin, the deal the government cut with the bankers, is less likely to create so jovial an environment. Again, incoherence rears its ugly head, or in this case, heads. The first problem is the effect the limitation of bankers' compensation might have on London's appeal to these high-flyers, who are high-flyers both in an income sense, and in the sense of their ability to fly to whatever tax locale they find attractive. I am no fan of the procedure by which bankers' pay packages are determined; corporate governance is so badly flawed that excesses are inevitable. But neither do I believe that risk-averse government civil servants, or born-to-wealth ministers can, without a loss of efficiency and dilution of incentives, substitute their views on pay for what a properly functioning corporate governance system, one that aligned private and public incentives, could produce. You might want to make London attractive for international financiers, but you can't do it by attacking the economic propriety and moral basis of their incomes. The disease is poor corporate governance, which can't be cured by political posturing.

Nor can it be cured by taxing earnings in excess of £150,000 at a 50 per cent rate. The government defends this policy, which clearly contradicts its desire to expand the City, on two grounds. First, the high rate is needed to prove to the middle and poorer classes, whose benefits are about to be reduced, that "we are all in this together." Secondly, the 50 per cent rate is temporary. Or so says the Chancellor, who fills the dual-and, at times, duelling-roles of chief political strategist for the Tory Party and keeper of the national finances, the man who proved that politics trumps economics by proposing a special "fee" for non-doms (I am one such) that Eamonn Butler, director of the Adam Smith Institute, estimates brought £162 million into the Treasury at a cost of £800 million lost through the departure of thousands of non-doms. The fee, rather than a more sensible tax graduated according to income, was proposed as a substitute for some inheritance taxes in what proved to be a successful effort to frighten Gordon Brown into calling off the election he seemed at the time almost certain to win. 

Like the non-dom fee, the 50 per cent tax, by the Chancellor's own reckoning, is unlikely to raise much revenue-unless a study he has ordered shows that it does, in which case "temporary" might take on the meaning of many "temporary" government measures over the ages. Besides, Mr Osborne has not directly repudiated the Deputy Prime Minister's suggestion that any reduction in the 50 per cent rate be accompanied by a new tax on wealth, or the Business Minister's call for a "mansion tax" — a less incentive-destroying tax than a high marginal tax on incomes, as readers of Henry George will be aware, but not one to encourage wealthy investors to come to or remain in Britain.